IRS Puts Out RMD Waiver Guidance
September 24, 2009 (PLANSPONSOR.com) - The Internal
Revenue Service (IRS) on Thursday provided sponsors with two
sample plan amendments to help them implement the one-year
waiver of the required minimum distribution (RMD).
According to Notice 2009-82, the amendments provide
that participants and beneficiaries can choose to receive
or not to receive the 2009 RMD and provide for the
rollover of certain 2009 RMDs.
The tax agency document said sponsors may need to
tailor the sample amendment to their plan's
particular terms and administration procedures and must
adopt the amendment no later than the last day of the
first plan year beginning on or after January 1, 2011
(January 1, 2012, for governmental plans).
The RMD waiver was contained in the Worker,
Retiree, and Employer Recovery Act (WRERA) of 2008
(see
Bush Signs RMD, Pension Relief Bill
).
Also in the notice, the agency acknowledges that
because of the timing of the WRERA enactment, many
sponsors have not been able to put the required plan
amendments into place.
So, the agency said, plans will not be treated as
failing to satisfy the requirement that it be operated in
accordance with its terms merely because, during the
period beginning on January 1, 2009, and ending on
November 30, 2009:
-
distributions that equal the 2009 RMDs or that
are one or more payments in a series of substantially
equal distributions (that include the 2009 RMDs) made
at least annually and expected to last for the life
(or life expectancy) of the participant, the joint
lives (or joint life expectancy) of the participant
and the participant's designated beneficiary, or
for a period of at least 10 years were or were not
paid.
-
participants and beneficiaries were not given
the option of receiving or not receiving
distributions that include 2009 RMDs, or;
-
a direct rollover option was or was not offered
for 2009 RMDs or for other amounts that can be rolled
over pursuant to the rollover relief provided in the
following paragraph.
The IRS guidance also indicated that plan investors
who have already received their 2009 RMD can still roll
over the funds until the later of November 30, 2009 or 60
days after the distribution. The IRS indicated IRA owners
could also take advantage of the 60-day rollover period
extension.
The IRS document also presents a series of
questions and answers about the RMD regulations. The
latest guidance is available
here
.
Fred Schneyer
editors@plansponsor.com